TDS Challan refers to tax deducted at source. It is a form of indirect tax collected by the Indian authorities in accordance with the Income Tax Act, 1961. It is managed by the Central Board of Indirect Taxes. Under TDS, the person responsible to make certain specific payments like salary, interest, commission, rent, etc. shall be liable to deduct tax at a certain percentage (as specified) before making full payment to the payee.
Who needs to deposit TDS?
Every person liable to deduct TDS under the Income Tax Act is also liable to deposit this TDS amount to the Income Tax Department.
Due dates for depositing TDS:
TDS deducted by a payer for any month has to be deposited with the government by 7th of the succeeding month, but for March, it shall be 30th of April. For all TDS deducted and deposited, a statement has to be submitted on quarterly basis. TDS certificate shall be issued to the payee. ‘TDS challan’ shall be used for depositing TDS with the government. A single challan can be used to deposit tax collected under various sections of Income Tax Act. If the government wants or the assessee wishes to make payment of TDS without using a challan, the due date for depositing TDS shall be the same day on which TDS has been deducted.
Challan to be used:
Challan ITNS 281 is used to file Tax Deducted at Source from corporate as well as non-corporate assessees.
Pre-requisites for deducting TDS
Every person responsible for deducting tax at source shall obtain Tax Deduction and Collection Account Number (TAN). It is a 10 digit alpha-numeric number that can be obtained on depositing Form No. 49 B, available on NSDL website, along with the specified fee. Failure to quote TAN on all communications relating to TDS with the Income Tax Department would attract a penalty of Rs. 10,000 for all assessees liable to deduct TDS.